Multi-Million FBA and Private Label Seller Will Tjernlund

In 2014 Will Tjernlund and his brother Andrew sold $6 million of products on Amazon.com. They also generated around $1 million of sales on eBay, and half a million on their own webstores.

The year before, 2013, they sold around $1.2 million on Amazon. That was also the year Will graduated from the University of Minnesota, doubling the business’s full-time headcount from one to two.

How can two people drive that kind of sales volume? Well, the Tjernlunds’ business model is to develop their own “private label” items – lower-cost versions of products that they sell under their own brand names. They buy from manufacturers in China, and send the inventory into Amazon’s FBA fulfillment service. That’s the last time they have to handle their own stock.

I spoke to Will Tjernlund about how he got into selling online, his product development process, the merits of FBA, and what’s next for the business. Here’s what he told me.

Want to grow your Amazon business?

Automate pricing, request feedback and reviews, improve your marketing & SEO and a lot more. Amazon consultants help with difficult issues like suspension, or help grow your business. All in the Web Retailer directory.

The short story is that my brother started selling online, and he’s six years older than me. He started when I was 12 and introduced me to the whole world of ecommerce, importing and private labelling. At that age I understood how accessible and easy it was, and how it’s such an opportunity for every single person.

Nowadays it’s not that rare for someone to buy a couple of hundred units on Alibaba and try to sell them on Amazon. But back in like 2002 when my brother started, it actually was very rare. He was a full-time student at college at the time. He wasn’t making a full living out of it, but a good amount of money and knew that if he dedicated a full 40 hours a week he could take this thing to the next level.

I started buying books and selling them to make some pocket money

When I started college I was selling to sell, I would sell things left and right – textbooks, anything really. When I got later into college I started importing and private labelling. But at the beginning I just knew how easy it was to list stuff on Amazon, and the university’s bookstore was ripping kids off, buying their books back too cheap. So I started buying books and selling them to make some pocket money.

Then I got to a point where it just couldn’t scale any more. I could find people to buy books from, and resell them, but I wanted a scalable business that could also be automated. That’s when I started selling private labelled products from China because it’s much easier to scale the business, as long as you have cash. And it’s really repeatable. Once you’ve ordered the item and you know that it’s quality, you can just keep ordering as soon as your inventory gets low and the business kind of runs itself.

As I got into college I started selling more and more, until I graduated and teamed up with my brother. We’ve been working together selling on Amazon since then.

What were you studying at college, was it a business course?

I majored in economics in college, but I wouldn’t say that I get that much out of my degree. It’s more from reading articles and listening to podcasts. I’ve learnt the bulk of my ecommerce knowledge through those means. They don’t teach ecommerce or anything like ecommerce at the university I went to. Mostly I learned business jargon and how to write a really formal business letter.

What was your first experiment in importing and private labelling?

My first private label products were marijuana vaporisers

My first private label product was actually in a grey area – I was selling marijuana vaporisers. It was weird because I couldn’t fulfil them through Amazon, but they’d let me sell them on Amazon. It was this grey area where Amazon doesn’t want you to sell marijuana or tobacco products, but at the same time they wouldn’t take down my listing. I made a bunch of money out of them, but since it was in a murky area I decided to move forward and do different items. I didn’t want to build the business around an item that may not be allowed on Amazon in six months’ time.

What was your strategy back then? Was it to develop a niche or just sell whatever product was profitable?

At the time I didn’t have any idea, I was just looking for a product that would make the most money possible. The vaporisers were fairly small and I could ship them very easily. That made my life very, very easy. Now that I’m more experienced and doing a lot more in sales, I try to think forward when I’m sourcing a new item and plan what other products I could sell into that niche. And I want to make sure the supplier has a certain amount of SKUs, so if I increase my product selection I don’t have to go out and find new suppliers. I can use the suppliers I already have and just go after other interesting products that they make.

What was the next step after the vaporisers?

I got in a weird situation time-wise, where I was two months out from graduating and also working with my brother full-time. I was looking for a new product, but before I got a chance to order a sample and go through the whole process, I was already working full-time with my brother.

My last semester only had one class, and my university was a two-hour drive away from where I live. So I just drove up once a week, went to class, drove back and did that for three months until I graduated. A bunch of my friends had already graduated, and I was all ready to move on with my life.

My brother already had the business going, but it was very small scale and he was waiting for another person to help take it to the next level because he could only do so much on his own.

Was your brother’s business in a particular niche or more about selecting one product at a time?

It was in a particular niche. My family owns a ventilation and cooling manufacturing company, and my brother and I grew up with that stuff around the house all the time. So we started selling cooling and ventilation equipment first, because that was the easiest for us to vet the suppliers. We could contact the Chinese suppliers and get down to business quickly because we knew exactly what we were looking for. The HVAC niche is very old school, which made it easy for us to get into Amazon and online because the majority of the competitors thought that’s not the way you do business. They didn’t want to grow with the new economy.

So were you adding a new sales channel to the family business, or doing your own thing but using the product knowledge?

In the ecommerce space it’s about being creative, finding different ways to market niches

More doing our own thing. My family manufacture for wholesale and do all B2B while we do B2C. It’s all about having the flow as lean as possible and making your processes very tight. In the ecommerce space it’s more about being creative and finding different ways to market niches, and finding niches that haven’t been exploited yet. When I order something from a Chinese supplier I don’t bug them about their manufacturing process, I pay the money and let them worry about it.

So I joined the business around the end of 2012. Then in 2013 working with my brother, we did around $1.2 or $1.3 million in sales. And in 2014 we did around six million dollars in sales.

That’s five times the sales in one year! How did you grow so quickly?

It’s all about having cash. You can grow as fast as you want as long as you have cash. That first year was all about growing our cash reserves. We reinvested all of it and added a bunch of SKUs. Between adding a bunch of SKUs and reinvesting the cash, it made it very easy for us to grow very quickly.

Did your strategy change or did you just scale it up?

We went after certain markets and just completely saturated it. We’d go after a certain product and try to private label it, and also contact the top five brand name manufacturers for the product and buy from them too. So if customers are shopping around, we can sell them a private label version or any of the quality brands. Even if they don’t buy the private label version they are still going to buy from us.

We went after certain markets and just completely saturated it

Say I’ve got a Seattle-themed coffee mug. Let’s say a Starbucks coffee mug sells really well, and a Seattle’s Best Coffee mug sells really well. I would create my own coffee mug that would be some sort of Seattle brand, then I would contact Starbucks and Seattle’s Best Coffee and carry their mug too. So when you type in coffee mug from Seattle, I get the top three listings right off the bat.

A lot of US brands, as long as you have some cash and you can talk yourself bigger than you are, will sell to you wholesale if you say, “Hey, I’ve got the cash ready, I want to make an order right now.” You’re a salesman’s best dream, just calling up and wanting to do a big bulk order. People rarely say no to us, so it’s very easy to add US vendors. It’s much harder to come up with your own product and source it from China.

What’s the benefit of carrying the brands? With the private label version you could have quite a high profit margin, but I assume you’re not making much on the brands.

If I sell the other two brands of coffee mugs besides my own, they might sell a thousand each of their mugs a year and I might sell 500 of mine. Let’s say I’m making 10 bucks a unit off mine and I make a dollar a unit off theirs. Why not make that extra two grand? It doesn’t take any more effort to add one more supplier. So why not make the extra amount of money off ours and a bunch of side money up-selling the US brand too? Yes, the margins are less but it’s still margin and it doesn’t take any more effort for us. We’re making some money out of every customer that buys a product in that niche instead of just making money off a segment of the customers.

So are these products that don’t already have a lot of competition on Amazon? So whether it’s a brand name or private label version, it’s likely that the sale will come to you?

Everyone wants to sell the top selling item. It’s such a dumb mistake.

Yeah. Usually if I see there’s a bunch of sellers for that product I just won’t even go after it, unless they’re all merchant-fulfilled. You can see the way the Buy Box works, it’s a combination of being in Amazon Prime, having a good seller rating and having a low price. Sometimes I look at some products and see that no one’s going through FBA, so I’ll compete with them because I know I’ll own the Buy Box. But you see some products and they have 30 sellers on the listing, all with 100% feedback and fulfilled by Amazon and those ones I just forget about because there’s no way I can compete.

The number one mistake I see on Amazon is that everyone wants to sell the top selling item. It’s such a dumb mistake. I was talking to a guy on the phone the other day and he was saying how he wanted to sell his iPhone case a thousand times a day. I told him it’s going to be a million times easier for him to sell a thousand different iPhone cases once a day than to sell one case a thousand times a day.

That’s the strategy we go after – throw everything at the wall and see what sticks, as opposed to wasting all the time on one item, marketing it, designing it, before you even know that there’s demand for it. It’s like a Lean Startup mentality.

Can you tell me more about how that works? Let’s say you’ve identified a product that might be profitable, what’s your process then?

I test the market immediately. It depends on the product because every one has a different way to market, but I’m not afraid at all to throw up a listing even though I have none of the product. If someone orders it I will just order from someone else on Amazon and send it to the customer, so I can start seeing certain demand at a certain price ahead of time. Maybe I’m losing 10 bucks a unit every time I sell one, but at least I figure out the demand. If I waste $2,000 doing that it’s better than wasting $20,000 on a container that never sells.

I wrote something very similar to that in my first blog post here, but it didn’t seem to resonate with people. Basically “don’t buy it first, sell it first”.

They’re scared to put it on Amazon and see that it doesn’t sell.

Some people are just wantrepreneurs, some people just like procrastinating. They like to sit there and design their product, they email the supplier back and forth, design it some more and then do another tweak and do another tweak. They’re scared to actually put it on Amazon and see that it doesn’t sell. And so they sit there and procrastinate and pretend like they’re perfectionists. When really it would be much more helpful for them to just throw a thousand items on Amazon, see which ones stick, and then go after those suppliers and after those niches. Honestly, I think a lot of people are doing a form of procrastination.

So how much research do you do perform before taking some action?

A lot of the ways I find products are like pure intuition. I just see a product, and I know it’s going to be the product for me. But there are certain things I look for. I don’t want to sell something that has electronics and I don’t want to sell something with a bunch of moving parts. And I don’t want to sell something that’s super competitive. So if it’s one of those three things I just cross it off the list.

Look for a niche of a niche

After that the best way I can define it is I look for a “niche of a niche”. Like with the spin mops that are really popular on Amazon, instead of going after the consumer spin mops, I will go after the industrial spin mops. The standard spin mops go for $49.99, but an industrial spin mop goes for $149.99, even though it’s essentially the same thing – just a little more heavy duty.

Then I would create a listing, and start selling on that listing for maybe $10 below the next competitor, while I’m waiting for the supplier to get back to me with a price sheet. Once I get the price sheet, I’ll compare prices and see if it’s profitable. Then I’ll place a sample order for one of every one of their items to see what sells and what doesn’t. From there I’ll adjust my order for the next time.

When the orders are coming in but you don’t have the product, do you just order from another Amazon seller to keep your ratings clean?

Yeah. Usually I can find it cheaper somewhere else too. I’ll go to an industrial supplier website or something like that and just fill out my billing address and the customer’s shipping address and pretty much drop ship them.

It tests the market at a fraction of the price, because when you order a container you’re probably spending somewhere between $30,000 to $60,000 in inventory and you just don’t want to risk that. If you can sleep better at night selling a few items that you don’t have in stock yet, just to prove the concept, it makes your life a lot less stressful.

Where do you get the raw ideas of products that might work? Are you just browsing Amazon or do you use tools?

I see people use tools and I see people use best seller ranking. But if you always use best seller ranking, then everyone will always sell the same items. I do it mostly by kind of getting lost on Amazon. There is so much stuff on Amazon and I just keep clicking over and over again. This item’s suggested to you because of this, and I’ll click that maybe 50 times and get super deep into Amazon, trying to find the super obscure items.

I go deep into Amazon, trying to find the super obscure items

Or I will go to shop for things and I’ll see that there’s no cheap price for them. Recently I was looking for a pour-over coffee stand. It’s a very obscure coffee accessory – basically a stand to put your mug on. The cheapest one I could find on Amazon was $40 and all it was, was a piece of wood with a hole in it. I thought, well, that doesn’t make any sense. I can make that in my backyard. So I made a bunch of quick prototypes and threw them on Reddit and got a bunch of peoples’ input on the coffee stand. After that I made a quick design and got it up on Amazon. In 48 hours from idea to concept, it’s already in stock at Amazon and I’m already selling them.

I made a few myself by hand, just to test the market. Now that I’ve sold a dozen of them in the last week I’m going to see if I can get them manufactured.

Another good place for research is Reddit, because everyone who’s into a specific Subreddit, is super into that niche. You say, “Hey, what’s the most annoying thing that you have to buy for your hobby?” and they’ll be able to tell you right away. They’ll say, “This always breaks, or this sucks, or this is always overpriced but I have to buy it anyway because it works so well.” And then you choose Reddit as product research.

Do you try many domestic suppliers to find a source of products you are interested in?

Most manufacturers and wholesalers, especially US ones, if you go to their website they have like a “contact us” or “become a wholesaler” tab at the very top. I’ll just click that, fill it out real quick, no harm done. If they say no to me, I don’t care. If they say yes to me, then great, I’ll move forward with it. But the amount of suppliers I talk to and contact, is crazy compared to the amount of suppliers I actually end up working with. It takes me two seconds to write a quick email saying, “Hey, what kind of price can I get for this?” If they say a price I don’t like, I just move on to the next one, no big deal.

You’ve explained how you identify potential products, and also how you test the market, but do you use a tool to validate the product or assess sales in between?

They have tools like Terapeak that are supposed to tell you sales velocity, but I find them very inaccurate and they don’t have any stats on Amazon. It’s really hard to base sales history off of reviews or a best seller rating tool. So I don’t really use any specific tools. I’d rather just test the market myself than use a program to test it.

I’d rather just test the market myself than use a specific tool

I have a spreadsheet I use to check profitability, but that’s about it. I think that a lot of people are looking for a quick fix. They’re looking for that one software that will make their whole life easier, and don’t want to just sit down and put in the hard work.

Do you sell on other channels, like other marketplaces or internationally?

We sell on Amazon Canada but it’s pretty weak. I also did about a million dollars last year on eBay, and fulfilled all of our inventory through Amazon for eBay, so that was pretty seamless and easy. eBay customers are kind of annoying to deal with. But besides that it works well.

Between all of our ecommerce sites, probably six or seven of them for different niches, they probably did around $400,000 to $500,000 in sales last year combined. The ecommerce sites are more to add legitimacy to our private label brands and to protect us in the future when Amazon starts selling everything directly, so we’ll have a backup plan.

Do you mean to protect yourself against Amazon selling your products?

Yeah. We’ve had Amazon contacting my family’s company and I’ve heard it from other people too. Amazon just goes on the top selling products and makes their way down the list contacting the manufacturer and asking if they can be a vendor. Eventually, five or ten years from now, Amazon’s going to have contacted pretty much every single manufacturer there is and filled out a contract with them.

All the third party sellers are doing research for Amazon

Amazon made it as easy as possible for sellers to sell on Amazon, so a bunch of third-party sellers jumped on. Amazon sits back and sees which items are selling the best, which ones don’t, then contacts those manufacturers. They have some really legit stats and know exactly which items to go after first. Pretty much all the third party sellers are doing research for Amazon.

Why do you think eBay buyers are more effort to deal with compared to Amazon buyers?

I would say it’s like eBay buyers are the people who shop at Walmart and dollar stores. And Amazon people shop at Target. Amazon people will pay slightly more to have more quality experience with better customer service and a cleaner environment. The eBay people are sitting there looking for a good deal. Say if you’re buying a new fishing pole on eBay, you might research and look for two weeks straight until you find the perfect deal. Someone who’s buying a fishing pole on Amazon will do one quick checkout the first time they go to Amazon.

eBay buyers will complain in a second

Amazon deals with all the customer service, returns, all that stuff. With eBay, if there’s the slightest little thing different from what the listing says or if there’s a slight bend in the box or something like that, they’ll complain in a second. An eBay customer has probably been planning this purchase for two weeks, if not months. They’ve finally got it and if it’s not perfect they freak out. The Amazon customers have no emotional attachment to their purchase. They just did a one-click checkout, forgot they even ordered it, and got it at their house two days later.

Do you sell any further afield like South America or Europe?

I’ve thought about South America, Amazon Mexico, but they’re only selling books right now. I haven’t really thought about Europe because a lot of our products are home improvement products. I’ve been to Europe a bunch of times and it doesn’t seem like they’re the home improvement type of people. In the US, there’s Home Depots and Lowe’s everywhere. Everyone wants to constantly improve their house, while in Europe it’s a little different.

A very normal weekend in the US for a couple to go to Home Depot, buy some new thing and go install it in their house. That’s what we did this weekend. When I was living in Italy, it’s the last thing I can imagine anybody doing.

Do you use any inventory or listing software?

No. I’ll hire a virtual assistant if we’re going to add a bunch of listings. For inventory management, I have about a million dollars right now in stock at Amazon, and about a half-pallet in stock at our warehouse. So everything’s at Amazon and so I just use Amazon to keep track of my inventory. They send a bunch of replenishment orders and do it that way.

So how do you keep your stock levels accurate and make sure you don’t oversell?

We use FBA for eBay orders so when we take an eBay order, it’ll automatically subtract it from our Amazon inventory.

If we are out of stock at FBA and get an eBay order, at that point we’ll just drop ship it and take the loss. But that really never happens because the way we set up our replenishment alerts, we always have plenty in stock by the time the next order arrives.

Let’s say we sell 30 units a month of a certain product and it takes us two months from us ordering it to getting it in stock at Amazon. As soon as the inventory gets below 60 units, they send us a report saying, “Hey, you need to order this again.” And so we go and order it again, and by the time it gets back in stock we usually have like five left in stock.

So your sales are pretty steady? You don’t have big spikes?

Yeah. And lately we’ve been kind of flexing our muscles and ordering very large quantities, so we can get discounts and push our profit margins up. Right now we have a crazy amount of inventory in stock.

We sent two truckloads yesterday, and we’re sending another truckload today. It’s a delicate balance getting exactly 26 pallets – you can’t fit any more on a truck. And after 13 pallets they make you pay for the whole container anyway. So you might as well fill it up.

Stock in the Tjernlund’s warehouse ready for shipment into FBA

Why do you favour FBA so much?

I think the main reason I use the FBA exclusively is because it allows me to create a much bigger business than I could on my own. If I shipped out every item myself, if I marketed everything myself and I sourced everything myself, I would be busy all day trying to send out individual packages and tracking people down. But instead using FBA, we were able to run a seven million dollar company with just two people. FBA took care of all of the busy work and we got to spend our time making sure the business grew.

None of the other fulfillment services make me Prime on the world’s largest ecommerce site. Amazon has the most eyeballs looking at it and they make it the easiest for me to fulfil my items. Even though they might charge a slightly higher fee, it’s worth it in the end.

It’s amazing how much you’ve done with just two people. Is the team going to get any bigger?

We have a secretary now, and we’re in the process of hiring someone to be a shipping person, box stacker and labeller and that kind of stuff.

We receive all of our items in at our warehouse, put a label on each one of them, and inspect each one before we send them into FBA. Usually that’s my brother and I doing it, but now it’s going to be a new employee hopefully.

What’s yours and Andrew’s roles in the business? Is that changing with the new employees?

Yeah. We’re in the process right now. We were in a growing phase all through 2014 and we were just growing so fast that we weren’t really paying attention to anything else. Now in 2015 we’re trying to become more efficient, writing out processes for everything so we can hire people and train them in. For the time being my brother and I are trying to get everything as neat and easy to work with as possible, so we can bring people in and they’re not totally overwhelmed their first day at work.

In 2015 we’re trying to become more efficient, writing out processes for everything

My brother handles the day to day, making sure everything runs smoothly, that the suppliers have been paid on time, making sure we’ve been paid, all that kind of stuff. My job is to find new products, create new ecommerce sites and just to create new things. My brother’s job is to keep the machine running so I can keep the business growing.

The product research is pretty much the only thing that can differentiate yourself from other Amazon sellers. If you outsource that you’re pretty much doing nothing, and that means some virtual assistant making three bucks an hour can do your job better than you can. That shouldn’t be the case.

How do you go about naming your private label products, packaging and branding?

From the 100 foot view, it looks as if we do a decent amount. But when you look up close it’s not really that much. We’ll get custom packaging with our logo on it, and I’ll buy a domain with our brand name and have a website and custom email, so it looks like its own company. Really it’s just a private labelled product with a quick lead page thrown up.

Within an afternoon I can have the listing up with a brand new website

I try to get it done as fast as possible and move on to the next product. I know people could sit there for six months trying to name a product and get a good package for it. That’s six months of sales that you’ve just thrown down the drain. So I usually just pick a name within five minutes that sounds kind of catchy and professional. Then I’ll go over to fiverr.com and have someone whip up a quick logo. Within an afternoon I can have the listing up with a brand new website, a brand new logo and everything.

It’s like the Lean Startup method. Because I finished mine in one day, I can pivot a million times in the next six months. The person who took six months to design their brand can’t pivot even after six months, because they have all that time invested in their product.

You have a site called FBA Expert where you share some of your knowledge and experiences. Why have you decided to do that?

I started getting into the internet marketing scene a couple of years ago. I was thinking, if we can do a million a year on Amazon, there must be some guy who’s doing a hundred million dollars a year. If I could listen to his podcasts and read his blog I’d learn a lot of stuff.

I started Googling different FBA experts and looking at their earnings reports. A lot of people were making $2,000 to $5,000 a month, but we are getting close to $20,000 a day. It was like wow, I can’t believe these are the people that are giving out advice. Readers are looking up to them as experts in the field, even though they have a business that barely makes them a full-time income.

I can’t believe these are the people that are giving out advice

I felt like everyone was being led the wrong way when it came to selling private labelled products on Amazon. I thought that I have legit experience, I know what I’m talking about and I have yet to find someone who’s doing as much sales as my brother and I are. There might be entire companies doing more sales than us, but I haven’t found a team of just a couple of people who have brought their business to the next level.

So I thought if people find it interesting that someone’s making $3,000 a month, they will probably find it interesting that someone’s making over $300,000 a month. A lot of people are giving out bad information about Fulfilment by Amazon, and the only way to change it is if I started adding to the conversation.

How are you developing the site, and what are your plans for it?

Well, I opened a private FBA Mastermind forum last week where Amazon sellers can talk and send private messages, and communicate easily without it being open to the whole world. I go through and vet the sellers to make sure that they’re legit Amazon sellers and have selling experience. So I’ve been building the community there which will be interesting.

The FBA Expert is, whenever I get the same question about five times in a row from Amazon sellers I usually go and write a blog post about it. I can get all my thoughts about it in one place and make it easier to share with people if I get that question again. But I know I’m just young and hungry, and obsessed with Amazon, so when I get off work all I want to do is work on my blog and sell more stuff on Amazon and talk about Amazon more. It’s a good hobby to get into. I just thought that other people were doing it and don’t have that much experience, so if they can do it I can do it.

I’m just young and hungry, and obsessed with Amazon

I’ve had some people say to me, “Well, why are you even doing this Mastermind? Why are blogging if you’re making so much on Amazon, why are you wasting your time with it?” I can see their point, but at the same time there’s only so much you can do each day for your business. I’ve got to have other outside hobbies. If I put in ten hours stacking boxes and sending stuff to Amazon, it’s nice to have a little release and creativity to write and that kind of stuff.

So are there other people in business or internet marketing who you follow or admire?

There’s a bunch of people. I really like the guys from Tropical MBA and Empire Flippers. They’re people who practice what they preach and they’re actually running businesses, so it’s interesting to hear their input. Opposed to someone like Pat Flynn who tries to teach you about how to make passive income, but all his income comes from his podcasts, not any business he really created.

So I like to follow people who actually have experience in the business, more than talking heads who will just regurgitate what everyone else has to say, “Hey, this gives the customer the best experience possible and you’ll always be in business.” I think that’s a cop-out and the easy way to describe it instead of actually getting into the nitty-gritty details.

On your core business, the selling business, do you have a plan for the next year or two?

The plan is to make myself location independent and take myself out of the business physically. Everything I do for the business is done through a computer, so I don’t have to physically be there once I hire people. It’s shifting the business over from a classic bricks-and-mortar warehouse company to a more internet-based company where the team can be all over the world.

It takes certain people to find a product that’s going to be profitable

I’d hire a shipping manager whose job would be to manage shipments coming in and out and make sure they get out on time. Then I’d hire someone to create listings, and someone who just does marketing, so I don’t have to sit there and do all the little busy work.

Anyone can put up an Amazon listing, anyone can post a product, anyone can do any of those steps. It takes certain people to find a product that’s going to be profitable, marketable, and doesn’t break all the time.

In the world of ecommerce, what trends or changes do you expect to see over the next year? What about the next five years?

Over the next year I see Amazon making it easier and easier for customers to shop on Amazon. I see Amazon going into bricks-and-mortar, and I see bricks-and-mortar stores going more online. Everyone wants to have the best of both worlds.

In the next five years I think there’s going to be a new sort of Google Shopping, a better version of it, that will make it so every item on the internet has one price. At the moment you can still do online arbitrage – buy something cheaper one place and sell it for more somewhere else without even touching the item. Eventually everything on the internet is going to be one price.

I’d want something where I can type in a UPC number and it tells me the exact lowest price it is on the internet. Once a program like that comes out, everyone’s going to have to switch their product to that price because the market’s going to make them.

Sellers will try to fight that by differentiating themselves on service, or anything else they can, rather than automatically going to the lowest price.

I don’t know if I really believe in that whole service thing, because for me as a consumer, if I bought a TV somewhere and found out I paid $100 extra, but the person I talked to on the phone was really, really nice, I would still say, “I can’t believe I overspent.” It doesn’t matter how nice the customer service is, how nice the imagery, unless they give me a $100 bill later on saying, “Sorry, for ripping you off”, I don’t think that customer service will ever beat price for me personally.

Will, it’s been a fascinating conversation, and I’d like to give sincere thanks from me and Web Retailer readers for sharing so much about your business. Your success is much deserved and I hope it continues.

Want to grow your Amazon business?

Automate pricing, request feedback and reviews, improve your marketing & SEO and a lot more. Amazon consultants help with difficult issues like suspension, or help grow your business. All in the Web Retailer directory.

Post navigation

One thing I’d like to know is how he find american manufacturers and suppliers. I did the googling thing but most of the time, the result I get are for pretty useless stuff…
I wish there was a single place like alibaba where you can find america manufacturers and suppliers.

Enjoyed reading your article and insight. We manufacture our own product, a high quality home improvement type product. We sell on Amazon, as well as other places. We currently have someone that is piggybacking on a bunch of our listings offer our product at 2-3 times our selling price. We know they have to have us fulfill it if they get an order as we produce it in house and don’t have resellers. We have our brand registered on Amazon. How would you recommend that we get them off the listing. Amazon doesn’t seem to care. We do though as it creates a bad buyer experience.

Dave,
They do not have your product in stock. I deal with the same kind of people. They usually have around 20,000 listings and sell everything at 2-3 times market price. They are hoping you run out of stock, and a customer accidentally buys the product at the crazy high price. Then they order the item from you at normal price, ship it to the customer and keep the difference. Essentially online arbitrage

Tell Amazon that they are selling counterfeit products. Amazon HATES counterfeit products! If you say that in your complaint, Amazon will most likely take down their listing

Thanks Will! We filed a report, but only listed one ASIN, but stated that all of our products being sold by this party were counterfeit. They removed the one ASIN, so we’ll be working on submitting all of them today. Best regards.

Hi Dave, we have had the same issue. We submitted a violation report via Seller Central and have received the standard ‘we will look into it but won’t tell you the outcome for privacy reasons’ response. Two weeks have passed and the hijacker is still there. Was this the report you filled in? Or is there another for counterfeit claims? Cheers

So, the day after we had the initial item removed, we figured we have to fill out the form for every item. In the initial report, we stated that the party had 140 items of ours. We were busy for most of the day working on other things, but when I went to verify the ASINS, Amazon had removed them from all of our listings!

Thanks for your reply. I did not remove my comment so not sure what has happened there! Yes that is the same report we filled out. It has been two weeks and have not heard a thing from Amazon and the hijacker is still there. I have contacted Amazon and all they say is it is being managed by their ‘concerned team’ and that I will not be told what happens! This has occurred twice before as well, and submitting this form has not achieved the objective. Very frustrating!

Those people doing this make me so frustrated. I turn them in all the time. The worst part is if they have higher metrics then you and so they are able to edit your listing. I report them for trademark violation etc.
I did have an interesting conversation with a seeker support person who had an “unofficial” suggestion for the problem of these companies piggy backing on our listings and then marking the price up 2-3 times. This rep said to purchase one from them and immediately afterwards make your product to out of stock. This piggy backer drop shipper will be unable to fill the order and then you file an A-Z claim on them to bring to the attention of amazon the unethical business practices of these people.
We don’t want to take any products out of stock so these rogue piggy backers are my constant target.

They probably are piggybacking on your listing not because they actually want to sell the product but to see your page views. They price higher so people don’t buy from them.

They can run a report and it will tell them how many page views your listing has received. Then they can estimate your sales by assuming an 8-10% conversion rate of page views. If your sales look attractive then they may add a similar product in that category.

Dear Dave.
I have the same problem. After too many hours on amazon, I was told to buy the other peoples product , take pictures and then send them to amazon legal.
They will have them stop selling your product.
Catalog Dept told me about it.
The legal is the only way to stop it.

You would need to first – purchase the product from the piggybacker and get it shipped to you.. then determine if in fact it is YOUR product they fullfilled… make copious notes and plenty of photos and contact SC and make your complaint.. this is how they can be certain the piggybacker is really selling your product. Hope this helps…

This is very annoying, but don’t worry, it’s fairly easy to remove.
Just place an order from them, and open a case.
Explain that the product is different and that should do the trick.
Also, if you hold a trademark, you can write a cease and desist letter, and it scares most sellers.

Hi Will, thanks for sharing your inspiration story. We are generating around 30% of our sale from Amazon marketplace and our focus is on eBay. After reading your post, we will start putting in more time in Amazon FBA. Just like to know can you share your experience with the “outsource” which do the product posting for you in Amazon. How do you really manage them and know that they are putting in the right search keywords in titles? What sort of information you need to provide for them to work.

hey will – great stuff in here on e-commerce. I have 3 sites that I’ve started in the last year and man there is just not a lot of real talk out there. you guys have been working hard and doing great. it definitely takes time. one thing I would say: you guys really need to warp speed up the outsourcing thing on the basic tasks. here is a great resource for training your replacements: De-Mythify (http://www.amazon.com/-Mythify-create-systems-business-online/dp/1499602103/ref=sr_1_1?ie=UTF8&qid=1431119605&sr=8-1&keywords=de-mythify) no affiliate link, just straight to amazon. this book teaches your how to remove yourself from the tasks so you can focus on the important stuff that brings you value over time and keeps you competitive. check it out. I would love to join the community and learn from you guys and contribute whatever I can. I’ve got a friend who is selling a ton of stuff online and we share all our stuff to help each other out. let me know when the other web site is up and running! thanks – chris

Very much enjoyed reading about your story and your style of testing the market/demand.
Could you please elaborate on the market testing phase, as it is not quite clear to me?

When you say you create a listing for a product without actually owning any physical product and somebody orders your product through your listing
– how can you then order a competitor’s product, which does not carry your label, and have that send to your customer?
– does this not at the very least create confusion and a negative customer experience?

– also, I was wondering, when you create the listing on Amazon for this type of market testing, do you do any marketing at all or are you simply testing if you will get any organic sales?

Hi will…
Thoroughly enjoyed your insight. I wish I had come across this article long before I got swindled out of $1000 to attend “Amzon Riches” seminar. The money was for a so-called 3day course on how to get started with selling on Amazon. What it turned out to be was a 3day long commercial sales pitch that, at the end, set the attendees up to cattled into purchasing a so-called “Amazon Boot Camp” course which costs $15,000! Since then, I have just been trying to find someone honest to help me get started selling my custom made items via FBA/Private label. I am now 3mnths paid Amazon seller with not even 1 itme listed because I dont know what the next step is. Im hoping that you will have some workshops or lectures for newbies like me. Any help that is honest is greatly appreciated.

Very informative and helpful information for new Amazon sellers. We have been selling on Amazon since 2004 and now do millions of dollars a year on Amazon, very little on eBay and about 1/8 of what we do on Amazon via our own web sites. I an not over emphasize the importance of private labeling and having your own UPC barcodes if you want to have long term success, exactly as William has said in his interview. IF you don’t have your own label and packaging, it is super easy for copy cats to just piggy back on your successful products and take advantage of it. What makes matters worse is that now the Chinese sellers on Aliexpress have learned that they can send merchandise to Amazon FBA warehouses and compete directly with the U.S. based sellers using Amazon fulfillment and fast shipping, removing their biggest hurdle that was the long shipping times from China. I see more and more of this every day on Amazon and some of them even on our own items that I had to fight off recently. The Chinese factories will soon invade Amazon FBA warehouses with their cheap items and we can not compete with them. The only way to compete is to have your own brand and have their items removed if they piggy back.

Not making sense regarding Chinese factories selling on Amazon. If the factories sell on Amazon directly, then private label sellers will have hard time to compete since factories will have lower prices. But the Chinese factories cannot compete with the US big brands. Branding is very important. Importing to China is very hard because Chinese government protects its industries by not allowing foreign brands to import easily. On the contrary, Chinese sellers are entering the US market in a much easier way through US companies like ebay and Amazon—just my experience.

Funny how there is no mention whatsoever about the need for liability insurance, which is expensive to get. That is the number one issue with selling private label. Way too risky to do it without insurance.

Fascinated by your quick test strategy of selling products you don’t even have yet. What I’m confused by is how you can drop ship someone else’s product masquerading as your own? Or are you selling someone else’s brand for the market test to see if something is worth selling?

Im very new to Amazon FBA and all these stuff. But after nearly two weeks of intensive reading and learning all advices from all those so called experts, there were some questions which came to me like is BSR really the way to find product? Should i use the same strategy as maybe 100 000 other sellers? This article made it so clear to me! Great, great article. I appreciate it a lot. Now Im gonna read it again and again till i will have exact plan to make me stop being procrastinator (u named it so, so accurate, but i couldnt made it on my own how to get out of these trap). Thanks so much. Pretty much one of the best articles I have ever read.

Freight, Freight and more freight 🙂 I’m just starting out in FBA land and starting to run some cost analysis when it comes to freight. It sounds like your shipping all of the products to our warehouse due to the volume you company does. For us newbies shipping costs can

1. What freight company would you recommend for shipping directly to Amazon FBA?
a. do you recommend this at all since it sounds like Chinese suppliers are starting to get on the Amazon bandwagon.

2. White labeling products and possible infringement on patents. How do we find generic products that won’t get us in trouble later. So if a well known brand is selling a soap holder and you find one that looks exactly the same but with your logo on it.

Loved the article and really appreciate that you are giving back to the FBA family.

Fbaforward.com is a good option for a freight forwarder. They have good pricing and wide-range options for your products like inspecting your inventory, pallet, or carton-sized pricing.

I don’t like to use freight forwarding because of the increased cost (plus Amazon selling fees). I recommend that you only sell and inspect your inventory yourself until you are selling enough to where you literally can’t keep up. Even if that’s the case, you can generally raise your prices and still make money selling less units per day.

To answer your question about branding and patents. Don’t ever purchase any product with a brand name on it (i.e. Nike, P90x, etc.). If you are worried about patent or trademark your can perform a search for your competitor’s products on http://www.uspto.gov.

The more individualized and unique your product is the better it will sell. Don’t try to sell popular or big brand products. Try to find products that are sold by smaller sellers that are selling well.

Thank you so much for sharing. This was by far the best article I’ve read as it relates to REAL online experience selling on Amazon. Everyone else wants you to signup for their class/blog before they provide any potential tips. Seems as though these tips are generic in nature and just regurgitated over and over. I can appreciate your passion and work ethic as it hits home for me. You’re a doer and actually walk the talk! Unfortunately, my dedication and hard work benefits our military. As much as I love what I do, I’m interested in putting forth my efforts towards benefiting my family. I plan on checking out your website that was referenced to see what else I could learn from you. I’m a new FBA Seller, familiar with hard work and hungry to learn how this game is played. I know your a busy guy, but wanted to know if it would be okay to shoot you an email from time to time to get your input on different ideas/questions I may have. Please let me know. Thank you again and I wish you the best of luck with your business.

In no way am I affiliated with this guy and I don’t think he is selling anything (yet). But this case study will put into perspective on how the first order is like.This 20 year old kid goes through the entire process of finding a product and listing it on FBA. Some things that were put in perspective for me personally was the time aspect. Day 1 to day you actually start making money can be 2-3 months after running the promotions.

Some things I wish the gurus would spend a little more time explaining is supplier negotiations. The way I’ve been doing it is starting from the MOQ and asking them for the best price they have listed on their website. So they will have the product and usually a price of .70-2, I always push for the .70 cents on the MOQ order and once that is set in stone I push for lower pricing from their counter offer and leverage this by increasing the quantity. I’m not sure if this is the best way to go but its worked quite well so far. 2nd if I have identified the lowest price the are willing to go I start asking for specific requests to be made to the product included in the price we already agreed upon. Its always about leverage and then relationship with companies from Alibaba.

My main suggestion is don’t just find a product and resell it. Just like many people have stated on this chat roll, set yourself apart and take the extra day or week and read through the competitors reviews and see how you can improve on the product to minimize those negatives. The manufacturers can make the adjustments for your and if they can’t then most likely they are a middle man for a factory 🙂

HI GUYS, HAD AN ONLINE BUSINESS IN THE UK SELLING 1500 UNITS A DAY WITH 15 STAFF FOR ABOUT 3 YEARS. WE GOT TO THE LIMIT OF PACKING STORING CUSTOMER CARE ETC SO WE ARE NOW GOING DOWN THE FBA ROUTE IN UK AND ALSO EUROPE. SOME OF OUR BEST SELLING LINES HAVE SEEN A 700% INCREASE IN SELL THROUGH RATE AND SOME OF OUR WEAKER LINES IN THE UK ARE MUCH STRONGER IN EUROPE.

THE FBA GIVE CUSTOMERS THE CONFIDENCE AND TAKES 80% OF THE TOTAL SALES WORK AWAY FROM US. WE SIMPLE BUY/SELL NOW!

I WILL BE HITTING THE US VERY SOON! IVE GOT SOME GREAT PRODUCTS IN EUROPE AND IF ANYONE IS INTERESTED IN DEVELOPING SALES OPPURTUNITIES PLEASE CONTACT. I KNOW THE US AMAZON IS A COMPLETELY SEPERATE SELLING PLATFORM WITH DIFFERENT REGISTRATIONS ETC.

Your concept of selling before buying sounds great in theory, but how can you possibly assess market demand this way? You have zero marketing, zero sales, your product will not show up in organic searches. Even a great product at a great price won’t sell under these conditions, how do you just throw up a listing and get it to show up in search results in a meaningful way that demonstrates its market potential?

2nd question, at the beginning of the article you state that all of your sales from all of your niches totaled around $500,000 in a year. At the end of the article, you state $20,000 a day. That’s a pretty huge difference…

Sorry looks like no editing option I just noticed that was in reference to your ecommerce sites only, sorry! But I’d love to hear how you can test a product by posting it directly like that, without marketing/sales/reviews and everything else that get a product into customer view in the first place.

Inspirational story and some really good lessons, thank you for sharing. I have recently started my business and not doing too great yet. Hope to do better soon though.

What I would like to know, is it still possible to sell on amazon as the internet has made it possible for EVERYONE to have access to exactly the same products that I have access to, and as you said the suppliers direct can now even sell themselves on Amazon with the FBA arrangement.

I planned to purchase a product selling well on Amazon, but soon I found out that many sellers are selling the same product in different brands. Even though brands are different, the material , functionality , and appearance are all pretty much the same, so I didn’t think that product would be a good choice anymore.

I am ordering from a supplier who has started to sell on Amazon themselves and has a physical office here in the USA. Their products have good reviews on Amazon, I thought this might not be a bad idea to private-label from them.First, customers already tested their products and proved the quality. Then, this particular product comes with a few different look and colors that I can choose. Yes, I might sell the same model and same color ones from the supplier, but I am not concerned much at this time since I haven’t seen another seller on Amazon selling their products. I feel like that solely marketing on Amazon is not enough, so I may have to market or sell them somewhere else rather than just online.

The problem is that the seller you plan to buy from is already selling the same item on Amazon and you have to compete with your supplier on Amazon and that would be foolish. Unless if you import the item directly from the factory at factory cost, you will not be able to compete.

change brand, negotiate with the supplier not to sell the same product. Obviously, Amazon doesn’t care if US sellers survive or not. It makes the foreign factories flourish at ease, the same as eBay; However ebay foreign sellers take very long to ship to the USA which could discourage buyers.

Dear Will,
Before to launch that kind of business, please tell me what kind of company did you create ?
I mean what is the status : LLC, INC., freelance ?
Where did you incorporate ?
What about the taxes ?
How much do you earn at the end ?
Thank you in advance for your feedback.
Regards.

IF you already have the resources. This guy hands out a slew of judgment calls on people being “wantreprenuers” who are “scared” but opens the whole thing talking about how easy it is, albeit with one massive caveat: having the cash. He talks about how he just saturates the market, throws things at the wall to see what sticks, talks about buying in bulk and what have you, yet he seems oblivious to the silver platform he was given from age 12 onward.

Not only was his brother already successful, he came from a family who ran a manufacturing business. So he goes on to talk about how he can’t believe people go to people making 2-5K a month through FBA for advice when he’s doing 20K a day.

His arrogance prevents him from seeing the simple, glaringly obvious truth that the people doing 2-5K a month would have much more practical advice to give to someone who didn’t have the inside line on the industry before they were a teenager.

So yes, this is an informative, insightful article for similarly privileged and socially oblivious who have the infrastructure and resources handed to them. There is still value to this read for the average person , but the overarching lesson of this article remains that everything he’s talking about is easy peasy if you already have ready access to significant resources.
I’m sure this guy would be shocked to learn that it’s a little more difficult to throw a bunch of stuff at a wall to see what sticks when you don’t walk into successful business in place that was built by someone else before you can grow facial hair. Yes, believe it or not, silver spooners, most people don’t have gobs of cash lying around and have to make more measured decisions around finite financial resources and don’t get to walk into a ready-made success long before that first Sadie Hawkins dance.

The whole thing has a very “they have no bread? Let them eat cake!” air of obliviousness to it.

Hi Jason,
yes, somehow I do agree with you on his “way forward” speach…however I have seen a couple of youtube videos of him explaining further and he recomends to get a loan to buy more bulk or more products and to reinvest every money coming in into buying more inventory.
Which makes sense to the most common mentality of buying a fine car and a huge house and treat oneself to expensive restaurants as soon as the first million is being cashed. Either way some of his tips are trully valuable and I give him credit on what his achieved…some others would just think in heir the family business and spend money in the main time.

Haha that’s funny. But I am 100% American and only an immigrant to Canada. I try to shut out any and all political talk whenever I hear it these days however had I been able to vote I wouldnt have voted in either country. I will never be held responsible for whoever is in power anywhere. I don’t vote, I don’t care, I will never be labeled. So aside from that can anybody else give some advice for us (weak) Canadians?

Hello, So I just have one easy question. You said sometimes you put up a listing without even having the product to see if it sells..and that you’ll just order one from a competitor and drop ship …How are you getting sales and accurate info without reviews and feedback to test the market in the first place